GST exemption an 'administrative nightmare' for some B.C. businesses
Business owners say they're struggling with complicated updates to sales systems
As business owners in B.C. adapt to the federal government's two-month-long GST exemption, some say they're frustrated by the added administrative burden and an exemption list that leaves too much room for interpretation.
In B.C., the tax holiday is offering a temporary break from paying the customary five per cent GST on purchases such as food, books, Christmas decor, restaurant orders and children's toys, from Dec. 14 to Feb. 15.
It comes as part of the federal government's plan to alleviate cost-of-living pressures.
For some business owners, though, it's only adding stress to all already hectic time of year.
"I would describe this as an administrative nightmare," said Wes Lévesque, director of operations at Sheila's Catering Co. in Surrey, B.C., explaining it could take hours to shut the GST off for each item that is exempt.
"It's definitely a lot of work on the back end."
His bookkeeper, he said, is expecting to be "up all night" ahead of the Saturday start date.
Lévesque said he doesn't think the tax vacation will be helping the average Canadian.
Many of his catering customers are high-earners and he doesn't think the GST relief is substantial enough to offer them noticeable savings. Instead, he believes the federal government should give GST rebates to those who need it most.
The tax vacation "feels kind of like a half-baked, short-sighted idea," he said.
Vanessa Gammell, the owner of Tumbleweed Toys in Kamloops, B.C., said that, in addition to the administrative burden, the federal government's guidelines on how to implement the GST break aren't clear.
"It sort of leaves a lot of room for interpretation," she said.
As a result, she's been meeting and consulting with other toy store owners from across the country to try and figure out how the exemption applies to each of their products.
For example, Lego designed for adults doesn't qualify for the tax exemption but Lego for kids does, she said, and while a craft kit does qualify, a colouring book and markers don't.
Gammell predicts that processing sales in the store will now take three times longer, which means she risks losing sales to long lineups.
"I'm hoping that customers have patience and will wait. But I know that there may be some people that will leave their items and walk out the door because they don't want to wait."
Gammell said she's frustrated and feels that business owners weren't properly consulted about the initiative.
"I haven't talked to a single business owner that's affected by this, that is happy about it," she said.
Ian Tostenson, president of the B.C. Restaurant and Food Association, said some chain restaurants have told him that implementing the GST vacation is costing them thousands of dollars.
Changing sales systems is "not smooth at all," he said.
"In the middle of December … we should be focusing on the guest experience."
For customers in Ontario, where the federal and provincial sales taxes are combined as a harmonized sales tax (HST) of 13 per cent, customers will be saving $13 on a $100 restaurant bill.
But, the savings aren't as good in B.C., Tostenson said. Here, customers are only saving the GST, which means they save $5 on a $100 restaurant bill.
Tostenson isn't convinced that such small savings will motivate customers to spend more.
"Is it going to amount to increased sales? That's yet to be seen."
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With files from Michelle Gomez, Amelia John and Jennifer Norwell